Pakistan could turn into a transit trade hub

Published: November 22, 2015
SHARES
Email
CPEC to facilitate economic and trade links with Tajikistan, others. PHOTO: FILE

CPEC to facilitate economic and trade links with Tajikistan, others. PHOTO: FILE

ISLAMABAD: Hard on the heels of a recent trans-Pacific trade pact involving the US, Japan and 10 other countries, the South and Central Asia are making strides in the search for regional integration.

This partnership between the two close regions will lead to economic development in many countries, especially Pakistan, which may turn into a transit trade hub. Tajikistan, on the other side, is emerging as a gateway between the South and Central Asian nations and is working with Pakistan on developing economic and transit trade corridors.

Give and take: Transit trade between SAARC, Central Asian region discussed

During a visit to Pakistan in the middle of this month, Tajikistan President Emomali Rahmon praised the China-Pakistan Economic Corridor (CPEC), insisting the project would facilitate economic and trade links between Pakistan and Tajikistan as well as other Central Asian states.

Prime Minister Nawaz Sharif, on his part, made an offer to Tajikistan to use Pakistan’s seaports for imports and exports as these provide the shortest route for movement of goods.

The premier backed Tajikistan’s request for being part of the Quadrilateral Agreement on Traffic in Transit among China, Kazakhstan, Kyrgyzstan and Pakistan – an arrangement that will further improve regional connectivity.

Pakistan reconnecting with world, says Dastgir

Both the leaders were satisfied with the steady growth in bilateral ties and agreed to tap the vast potential in the fields of trade, energy, defence, agriculture, industry and regional transport communication networks.

In an attempt to promote energy partnership, they reviewed the progress on the Central Asia-South Asia (Casa) 1,000-megawatt power supply project and voiced hope that it would be completed by 2018. They instructed the Joint Commission on Energy and Infrastructure to hold its first meeting to explore and identify new schemes for the export of electricity to Pakistan.

In a bid to give a push to trade and transportation ties between the two countries and the regions, they resolved that the two sides would work with Afghanistan for an early finalisation of a trilateral transit trade agreement. However, it would not come easy as Kabul was insisting on including India in the partnership.

Romania explores trade avenues in Pakistan

The prime minister has, of late, expressed concern over the dwindling exports from Pakistan and directed different ministries to scout for markets in Central Asia.

Energy links

Pakistan is working with Central Asia on two energy projects – one with Turkmenistan for gas import and another with Tajikistan for electricity purchase.

For power supply, Pakistan and Tajikistan have decided to form a new commission that will work on cooperation in this field. Tajikistan has surplus electricity in the summer, a season when Pakistan faces acute shortages.

Pakistan, Tajikistan ink accords on defence and trade

Work on the Casa-1,000MW power project is close to getting under way as all necessary agreements have been signed. The commission will also work on a planned power transmission line from Tajikistan to the northern areas of Pakistan.

“The Casa-1,000 power import project will help Pakistan get cheaper and clean energy to minimise electricity shortages and also build close economic links with Kyrgyzstan and Afghanistan,” Tajikistan Ambassador Sherali S Jononov told The Express Tribune.

Among other sectors of the economy, the area of energy has been showing sustainable growth in Tajikistan over the last 15 years. During the period, hydroelectric power generation has remained stable.

Pakistan to hand over 2,281 acres of Gwadar’s free trade zone to Chinese

Apart from big plants, Jononov said, there were 20 medium and 40 small hydroelectric power stations in the remote mountainous areas, with capacity ranging from 5 kilowatts to 1,500 kilowatts.

“Hydroelectric power generation accounts for 76% of the total energy output in Tajikistan,” he added.

Chinese interest

Beijing also wants to reach Central Asia through the CPEC. As Afghanistan is not willing, China and Pakistan are working on an alternative route – the Quadrilateral Agreement on Traffic in Transit. This route will deprive Afghanistan of an opportunity to cash in on the benefits that will emerge from the CPEC.

Before the agreement on the $46-billion CPEC, Pakistan gave control of Gwadar Port to a Chinese company for developing and running the facility. China also plans to establish an oil refinery at the port.

‘CPEC a win-win opportunity’

Tajikistan, which is seeking oil imports from Kuwait via Pakistan, has been offered access to the port. Tajikistan may also have the facility to bring goods from Middle Eastern states and other countries.

Tajikistan is the only country among Central Asian states which is keen to give road and energy access to Pakistan. This can make Pakistan a trade hub as it will provide access to other Central Asian nations as well.

In such a scenario, Balochistan will win a substantial share in economic development and will be able to stave off negative consequences of the insurgency. Economic prosperity will overcome the threat of terrorism and ensure stability in the entire country.

the writer is  a staff correspondent

Published in The Express Tribune, November 23rd,  2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Facebook Conversations

Reader Comments (26)

  • salman
    Nov 23, 2015 - 8:47AM

    Good developments. Hope we finally capitalize on this massive opportunity. Its free $$$ for doing very less. Once all these express ways. motorways, freights network spread all over the country through CPEC, Pakistan will be the shortest route for every Central Asian country to export and import their goods.Recommend

  • Faheem
    Nov 23, 2015 - 8:57AM

    Could, could could. Would, would, would. May, may, may. Tell me when it is done! Been hearing this all my life.Recommend

  • Nav
    Nov 23, 2015 - 9:10AM

    Let me give an example, how opportunities should be capitalized by acting proactively. Yesterday, ASEAN countries announced ASEAN community – an economic block and a market place bigger than the European Union. India last month opened a India-Myanmar-Thailand Highway to capitalize this and to use this biggest trading block. Also, India wants to use the trans-Pacific trade pact to get business and become wealthy by building infrastructure and connectivity with these 2 trading blocks using India-Myanmar-Thailand Highway.Recommend

  • Prada
    Nov 23, 2015 - 9:13AM

    @salman:
    When you take into account the amount of security needed to guard the route, it will be much more expensive. Besides, cost of fuel is the lowest in a decade and threatens to stay there.Recommend

  • Humza
    Nov 23, 2015 - 9:14AM

    @Faheem: The key is to stay the course and realize development plans over time. This is only possible when people give up on quick fix and quick money scenarios in typical 3 rd World fashion. Building infrastructure takes time but quick fix dharnas and Arab Spring revolts only create instability. In the West governments devise 10 year and 25 year plans. In Pakistan people want an elected government to fix things in just one term in office. Hats off to Nawaz Sharif and team for accomplishing so much in hardly three years!Recommend

  • Yasin
    Nov 23, 2015 - 9:30AM

    Could, would and should….words that pretty much describe Pakistan and possibilities but not realistic enough given our track record on deliveryRecommend

  • Abdul Wahab
    Nov 23, 2015 - 11:27AM

    Tired of listening, could, may, probably… When will we get a news about real success??? Recommend

  • Rumormonger
    Nov 23, 2015 - 12:39PM

    With near zero investment in education, thats what we will be reduced to. Is there any other example of a country who focuses only on becoming a trade corridor?Recommend

  • salman
    Nov 23, 2015 - 1:12PM

    @Prada:

    I know Pakistan is filled up with pessimists like you and some of the posters here, but let me tell you its not Pakistani project anymore. The Dragons aka Chinese are behind it and they can do and make do anything. They are the future superpower so Pakistan just needs to ride their success. Its beyond stupidity to even claim that it will be expensive project with all the expense for security installations. Mind you China will even provide soft loans for submarines and possible Su35 deal in future to protect and guard ‘their’ investment through Arabian sea. They are growing exponentially and they need to import and export goods at that speed as well. China will target car industry in next 10 years so far they are way behind their Japanese and European counterparts so again this CPEC route will be come into play. Just wait and watch how things gonna develop in next 7 or 8 years when the route finally becomes fully operational.Recommend

  • salman
    Nov 23, 2015 - 1:14PM

    @Abdul Wahab:

    I guess you are a teenager and doesn’t have any clue about the economics infact you might have even not heard this word ever.Recommend

  • salman
    Nov 23, 2015 - 1:16PM

    @Rumormonger:

    LOL again so ignorant most of the Pakistanis are. It’s not a Pakistani investment its Chinese. Please start reading a better and credible newspaper. Thanks.Recommend

  • Ashraf P
    Nov 23, 2015 - 1:26PM

    @salman: “Its free $$$ for doing very less.”
    That happens to be Pakistan’s national obsession. Dollars for minimal work. The result of that attitude if before your eyes.Recommend

  • Kirmani
    Nov 23, 2015 - 2:20PM

    @Faheem: It takes time! Hearing the same development plan all your life? Perhaps you are a bit too young, brother?Recommend

  • Parvez
    Nov 23, 2015 - 3:08PM

    A world class transit hub requires a fast corruption free customs procedure among other infrastructure requirements…….can we really provide this ? Recommend

  • tellmore
    Nov 23, 2015 - 5:59PM

    @salman:
    When Afghanistan is refusing pass through it, then how Pakistan will reach Tajakistan? Is there any other route? How Pakistan can provide access to SAARC Countries markets when India Pakistan border is closed. How can even pakistan access the markets of India, Srilanka, Bangladesh, Nepal and Bhutan?

    To me all the article appear to be wishfull thinking to fool the people.Recommend

  • Junaid
    Nov 23, 2015 - 7:01PM

    For the first time after many years, I am feeling optimistic about my country – Pakistan.Recommend

  • Faruq
    Nov 23, 2015 - 9:57PM

    @tellmore. Tajikistan can be reached via China, can it not?Recommend

  • curious2
    Nov 23, 2015 - 10:01PM

    Almost 40 percent of Pakistan is in varying states of warfare – does that sound like a country that is going to be a “transit trade hub”? Of course not. Dreaming of greatness is nice – fixing the obstacles that confront you is a must.Recommend

  • AA
    Nov 23, 2015 - 10:07PM

    @Nav:
    Good so India is smart and swift, What it has to do with the topic of the Article ? Can Indians focus their energies to their own affairs please ??Recommend

  • salman
    Nov 23, 2015 - 10:21PM

    @tellmore:

    Go look at the map carefully and figure out how far Tajikistan is from GB area of Pakistan. Please educate yourself properly before commenting like an ignorant. We infact really don’t need Afghanistan.Probably you are a jealous Indian so you can be excused.Recommend

  • Jibran
    Nov 23, 2015 - 11:19PM

    I want to know who will utilize this route and for what kind of trade? Why would Chinese unload their goods off massive ships in Pakistan only to be transported thousands of miles via trucks all the way to their densely populated eastern provinces.Recommend

  • Feedback
    Nov 24, 2015 - 12:54AM

    This WILL work for sure, its a joint venture between Pak and China military, it has got to work. NLC and NHA and all the institutions that start with the world National will never let go of this golden opportunity. They always ask, what is common between the two countries, well the way the military run the country is whats common. We are also a single party state. The only difference is that single party don’t take part in elections they just take over.Recommend

  • observer
    Nov 24, 2015 - 1:46AM

    Transit hub for what and where to? Especially with Iran’s Chabahar port and connectivity to Afghanistan and central Asian states taking shape, why would this Pakistani Pakistani “trade hub” be needed? If terrorism is the trade, Pakistan is already the global epicenter as trade hub for all global terrorists.Recommend

  • syed & syed
    Nov 24, 2015 - 2:45AM

    Hostile Afghanistan, our corrupt customs the department which could not make a case against Ayan Ali, , poor road conditions even then the government is promising chanda mamun. Do not fool uneducated people of Pakistan. promising a heaven by 2018. There is already exists exists first class land route from Chahbahar of Iran to Moscow. Recommend

  • auginpk
    Nov 24, 2015 - 8:06AM

    Without trade with India and Afganistan, how can Pakistan become trade hub. Recommend

  • Raj - USA
    Nov 24, 2015 - 8:37AM

    We will be reading articles praising the CPE, on Pakistan-China cooperation, on the benefits CPEC will bring to Pakistan, etc. etc. Reason: Both the army establishment and the political leaders are sharing the kickbacks from China.

    Ishaq Dar was criticized bitterly by every TV anchor and analyst who are mainly retired army officers, for raising $500 million by issue of 10 year bonds at 8.25% interest. Compared to the Bond issue the interest rate (minimum guaranteed return) is 2.5 times of the bond issue, has to be paid on a principal amount that is 92 times of the bond issue and interest has to be paid for a period that is 4.5 times that of bond issue. Since, both the army and political establishment are benefitting from the kickbacks from China, signals have been sent to TV anchors and analysts not to be critical or probe CPEC and just keep praising it. We shall also see paid columnists writing such news regularly.Recommend

More in Business